POWER TO DESIGNATE AUTHORITIES

With this it will be convenient to discuss the following amendments: No. 158, in page 57, line 10, at beginning insert 'After 1st April 1995'.

No. 159, page 57, line 11, leave out 'in his opinion' and insert
following a report under subsection (1A) below, he believes that—".
No. 160, in page 57, line 16, at end insert—
(1A) Before designating an authority under this part the Secretary of State shall produce a report showing the extent to which the accountability of that authority to its electorate has been affected by the provisions of Part I of this Act.".
No. 161, page 57, line 12, after second 'the', insert 'preceding financial'.

No. 162, in page 57, line 19, after the second 'the', insert 'preceding financial'.

No. 163, in page 57, line 33, leave out from 'and' to end of line 38, and insert—

"(a) these principles shall be the same for all authorities;

(b) these principles shall be notified to authorities by October in the preceding year.'.

As the Bill stands, part VIII is entitled "Limitation of Charges Etc" and clause 104, the first clause in that part of the Bill, sets out the arrangements under which the Secretary of State for the Environment will have powers retrospectively to control, cap or reduce the poll tax of every local authority in England. Later on there is an exemption for authorities with budgets of less than £15 million a year. However, that is a sweeping. general central power given to Ministers under these proposals. Again, we see exploded the Government's claim that poll tax is a tool to make local government accountable to the electorate. Here we have the Government taking powers to ensure that, whichever way the electorate votes or whatever it decides about the local authority decisions in its area, the Government can countermand those decisions.

Under these proposals, the Secretary of State will have the power to order councils to reduce the level of poll tax. even after they have started to collect it and have implemented a budget based upon it. That will not only add to the financial and administrative burdens placed upon local authorities, but will throw budget strategies into chaos and further increase the powers of central Government over those communities. The implementation of these powers will cause huge disruption, whenever and wherever they are used.

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What is clear in this part of the Bill is that the poll tax is not about local accountability. It is about cutting the spending, the services and, above all, reducing the independence of local government yet again. We suspect that it is especially aimed at elected Labour authorities. Implicit, too, in those proposals is the idea that accountability is all right and will be satisfactory for authorities with small budgets of under £15 million. However, different parameters apply to authorities with budgets in excess of that arbitrary figure.

The inclusion of these powers gives the game away. Repeatedly, the Secretary of State has said that the poll tax will improve accountability and the responsibility of voters. He has argued that more people will vote as a result of the poll tax. I hope that he is right at least in that aim. I want more people to vote in local elections. However, what is the point? The point is totally undermined by the fact that, however those people may decide to vote on the level of their budget or services, the Secretary of State is reserving the right to himself to change the implications of their vote, and he is doing so on arguments which, frankly, do not bear scrutiny.

As the Chartered Institute of Public Finance and Accountancy has pointed out, community charges, which are to replace domestic rates, will change rapidly from year to year and will bear little relation to local spending. That has been pointed out to Ministers in Committee over and over again. Changes in grants and changes in the national business tax made by Ministers could, and almost certainly will, have serious repercussions on the level of poll tax. Again, we may see fluctuations and major changes which do not result from decisions taken at local level. Therefore, the ability of local authorities to adjust their income to take account of such changes is threatened by those proposals.

The Chartered Institute of Public Finance and Accountancy also pointed out,
that community charges
—that is the poll tax—
will be heavily dependent on variations in population and changes in the Government's assessment of a Council's need. This will considerably weaken the link between charges and council spending.
It has been pointed out previously that changes in spending, up or down, in local authorities can be affected by a variety of factors. They do not necessarily have anything to do with either competence, or, for that matter, incompetence, profligacy or efficiency. Changes in expenditure, up or down, are determined by a variety of often very complex factors and decisions.

Let us examine the implications of all this in a little more detail. Councils normally begin working on their budgets in the autumn. They come to their budget-making meeting in the early part of the year. They announce their budget and they fix a poll tax by 1 April, which is now the legal requirement. Election campaigns then begin. Elections take place in the first week in May. After these elections, after an authority has set and announced its budget, fixed its poll tax, and fought and won an election —in other words, it has gained the approval of the voters —the Secretary of State decides that he will overturn the whole procedure. He decides to designate the authority under the provisions of clause 8 of the Bill. The whole thing becomes a farce. The determination of the budget,
36
the setting of the poll tax, the putting of all the arguments to the local electorate are all a farce, because Ministers can then overturn and undermine the whole procedure, which includes the decision of the electors themselves. That is done by enforcing a retrospective change in the poll tax and, therefore, in the budget and the programme of the authority. First, this is done in the name of accountability and, secondly, of improving efficiency.

It beggars belief that these proposals can be put forward in that way, because they will do exactly the opposite. They will undermine accountability and they will cause disruption, inefficiency and ineffectiveness in the administration, not just of finances but, more importantly. of important local services. That was wonderfully summed up by the Minister for Local Government in Committee who, when talking about those powers, stated:
As I have already described, such procedures will enable us to use our charge capping powers to bring rapid relief to hard-pressed charge payers faced with excessive demands from authorities which, for some reason, seem quite irrationally to have no regard for the interests of their electors." [Official Report, Standing Committee E, 17 March 1988; c. 1484.]
It is difficult to find a better example of doublespeak.

The decision of the electors as recorded in the ballot box—presumably a decision that displeases the Minister and makes him decide to invoke his powers—is described by the Minister as
irrationally to have no regard for the interests of … electors.
What if the electors have chosen an authority of their persuasion and a council programme to their liking? That can hardly be described as irrational. Voting for a council of their choice is the conscious decision of people in a democratic society—but not a bit of it under this Government because that choice can and no doubt will be cynically set aside by central controls as it has been under the rate-capping proposals. At bottom, the proposals are yet another major central power for Ministers over democratically elected local government. They give Ministers the power to act in defiance of decisions of the local electors and against their express wishes as recorded in a secret ballot.

The Labour party is unwilling to accept such proposals or that such powers should be given to Ministers. That is why we have tabled the amendment to delete the whole miserable clause from the Bill.

Like the Opposition Front Bench spokesman, I too am sorry that these provisions are in the Bill, but, unlike Opposition Members, that is not because I regard the provision as wrong, but simply because the antics of the lunatic few on the Left have made the clause necessary. We should focus on that. We should be sorry for the fact that the clause is here, but we should consider why it is necessary and, if the clause is ever to be deleted, we should focus attention on the fact that local government must try to put its house in order. If local government goes on making community charge capping necessary, that is real proof that we have weak local government in this country because, by definition, local government which does not co-operate with the Government of the day is weak. [Interruption.] I shall explain exactly what I mean in a moment.

If one is to have a successful democracy in any country, one needs strong local government. I am not against strong local government but, because of the way in which it is behaving at the moment, I do not believe that it is
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strong. The evidence about why the community charge-capping clauses are necessary is overwhelming. At the moment, at least 10 councils are overspending by more than £100 per head. Indeed, two are overspending by over £200 per head and one by the gross amount of over £300 per head. If such sums of money are charged over and above the average community charge in future, any responsible Government, of whatever political colour, is duty bound to act on behalf of the country as a whole.

The hon. Member for Copeland (Dr. Cunningham) suggested that the clause may be aimed at Labour authorities. I hope that it is because that list of 10 councils which are high-spending are Labour authorities which must be called to account.

When is the hon. Gentleman going to get it through his thick head that one reason—the major reason—why Labour local authorities, such as the 10 that he is talking about are such high spenders is that they have the greatest concentration of need within their areas? Until he recognises that, I am surprised that he even gets up to make a speech.

I hear what the hon. Gentleman says, but when I examine the record and detail of those and other authorities, what I discover is gross inefficiency, gross mismanagement, and gross over-staffing. When such authorities put all those things in order, I will listen to the hon. Gentleman's pleas about money. In all these debates, and especially in this debate, the comments of Opposition Members are predictable.

I am pleased that the hon. Gentleman is beginning to recognise that the Opposition are predictable. That is because we believe in people having the right to an unfettered democratic choice in local elections to elect the council they choose as being in their best interests without such draconian powers which, if the hon. Gentleman were describing them in eastern Europe, he would call Soviet.

I am coming to the point that the hon. Gentleman has made. I am grateful to him for raising it so that we can talk about it in a minute. However, before I come to that point, I want to mention something else that the hon. Gentleman said in his opening remarks —that the clause gives the game away. Indeed it does, but the game that it gives away is that the Labour party has not the slightest intention of learning the lessons of the past; nor does it seem to have the slightest intention of co-operating. That underlines the fact that this clause is absolutely necessary because Opposition Members have given the game away about their future intentions.

The opposition to the clause is predictable. It starts by saying that the provisions are a restriction of local freedom. They are not, and I shall explain in a moment why I take that view. It suggests that the clauses are not necessary if local accountability works properly. Earlier in the Report stage, I made the point that exemptions and rebates were not the avenue down which we should go. I believe that community charge capping is the quid pro quo for exemptions and rebates because it is they that undermine local accountability.

The Opposition are revealing that they have a totally flawed view of the role of local government and an even more flawed view of local government's relationship with central Government. They are also revealing that, despite
38
harping on certain minorities, they intend to do their level best to ignore the need to protect the minority of voters in a Left-wing Labour authority. Such a minority needs thought and protection as much as any other minority.

If one thinks through the real role of local government, one comes to the inescapable conclusion that community charge capping is absolutely inevitable. If one thinks about local government and how it arises, one realises that it comes from two different things. It comes first from a feeling of "localness"—I shall say something about that later—but also from the need to organise national services on a local basis. The first of those roles—the expression of a local view—is the truly local role of local government. with which no Government should seek to interfere. It is the second of the roles in which central Government becomes involved—the need to deliver national services on a local basis. Central Government must oversee that and can dictate its standards to local government.

That point enables me to answer the point that the hon. Member for Copeland raised. Local government's form. powers and finances all derive from here in Parliament. If Government can define those things, Government can limit them; that makes community charge capping inevitable. In reply to the hon. Gentleman, I should say that no party in this country believes that local government can be absolutely free of obligation. We in Parliament insist that local government must empty dustbins and provide free education for every child over the age of five.

Would the hon. Member for Copeland defend the ballot box locally if a group of local electors voted in a county council that was pledged not to provide education until children were six? Would the Opposition argue that that is a matter for the ballot box locally, or would they, like me——

If a group of councillors fought a county council election on the promise that they would provide nursery education for the under-fives and that resulted in a higher poll tax, I would defend it. That is what the hon. Gentleman is trying to stop today, but that is where there should he free choice. If people want to vote for free school education outside the statutory system, they should be able to vote for it. if they are prepared to pay for it. Yet that is what the hon. Gentleman will not allow.

That is a fascinating smokescreen. The hon. Gentleman's silence on my point proves exactly what I was saying, which is that the Labour party, like us, believes, properly, that there are certain things that Parliament can force local authorities to do, such as educate everybody over the age of five. That is absolutely right. All parties believe that there are some things that local government must do. Equally—this is the other point behind the smokescreen—every party has several things which it believes local government should or should not do, with which other parties disagree.

Instead of the hon. Member for Birmingham, Perry Barr (Mr. Rooker) lecturing me on education and the under-fives, let us consider grammar schools or parents and children being able to opt out. If I understand Opposition Members, they would compulsorily require local government to get rid of grammar schools and they would prevent parents from opting out of the state system.
39
That is the Labour party, properly, choosing its policies. But equally it must be absolutely right for the Conservative party to decide what it believes is a priority, and it wishes local government to behave responsibly on finance. Faced with the evidence of local authorities not behaving responsibly, this party believes that it must act.

I cannot think how the hon. Gentleman reaches that conclusion from what I said. That is not the point. If, while acting in a financially responsible way, a local authority wishes to exercise discretion and go beyond its statutory obligations, that is a matter for it. I am merely arguing that there will come a point beyond which a local authority cannot go.

The Conservative party is saying that financial responsibility is a key element in strong local government. That is why, at the beginning of my comments, I said that at present we have a financially irresponsible group of councils which are therefore democratically weak. If we can establish strong finances, it then lies with the Government to provide limits, and those limits will be enforced through capping. That is proper and inevitable.

The limits are set in four ways. Central Government have no choice but to take into account the national economy. When 27 per cent. of public expenditure is spent by local government, no central Government in Whitehall can ignore it. If several local authorities intend to flout the interests of the national economy, capping becomes absolutely inevitable and is absolutely right. The same is true for the local economy.

The hon. Member for Rother Valley (Mr. Barron) asked me about local discretion on nursery education. That is all very well, but the spending power of the local community must be taken into account and the council must not take more than the community can afford to give. One must accept that if a borough has a vastly high community charge, it will drive people out selectively.

No. As I said earlier, there is the question of a minority. The Labour party is for ever lecturing us about its views on minorities. In return, I must point out that, if a Left-wing militant council is trying to soak the local community, there comes a point when somebody must stand up for the minority who are being asked to pay vastly excessive charges.

Does the hon. Gentleman accept that my local authority, Calderdale, which has not been controlled by Labour since 1974, two years ago had the second highest rate rise of 41 per cent. when it was run by the Conservative party? That was because the rate support grant had been cut from 85 per cent. in 1979 to 54 per cent. now and it had absolutely nothing to do with a Left-wing Labour council.

There are authorities and authorities. I am delighted to say that my borough council this year has reduced its rate by 73 per cent. and is providing better services than ever before. But if we bandy about the figures of small authorities, where will it get us?

Opposition Members will be relieved to hear that this may be the last speech that I make on Report, but I shall not stick to that intention if they bait me much further.

I have been following the logic of the hon. Gentleman's argument carefully and if I understand it rightly, having found it, the hon. Gentleman believes that the mandate given to central Government is stronger than that given to local government, so central Government have the right to overrule local government in the interests of the people of that area. Does the hon. Gentleman accept the other side of that logic—that if central Government of a different colour decide that a local authority is not maintaining services to a required standard, they can direct local government to spend more on those services by virtue of the same sort of mandate?

If the hon. Gentleman follows the argument through, he will find that if it is right for Parliament to decree the dustbins shall be emptied and that the over-fives shall be educated, then it is proper for Parliament to decide that the over-fives shall be educated. Naturally—that is the role of central Government. As I said earlier, local government arises from two wholly separate areas: the local feeling of differentness and separateness, which cannot be fettered, and the national provision of services on a local basis. A Government must involve themselves in that latter area.

What does the hon. Gentleman intend to do to protect minorities who vote Labour in areas where mean-minded, miserly, Tory councils are elected which do not provide adequate social services and many other services? Will he also protect the rights of those minorities?

Is the hon. Gentleman aware that this year the highest rate increases are in Tory-controlled authorities? For example, in Gillingham in Kent the rate rise was 42 per cent., in Melton in Leicestershire it was 41.2 per cent., in Suffolk Coastal it was 39.1 per cent., in West Wiltshire it was 41.4 per cent. and in Brentwood in Essex expenditure over target was 282 per cent. Is the hon. Gentleman advocating that those local authorities should be rate capped?

It occurs to me that perhaps an adjournment would be in order so that the Labour party can present one script. On the one hand we are being told that Parliament should increase the base services that must be provided and on the other that we should not spend money to provide them. That is a fascinating argument against itself.

When considering the point that the percentage increases may have been large, will my hon. Friend bear in mind that my constituents in
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Middlesbrough pay the highest rate poundage in the whole country—282p in the pound? Although this year's rate rise in percentage terms is small, it is penal.

That is why authorities with small budgets arc exempted from these clauses. The real risks to local and national economies come from the huge spending authorities which spend vast sums rather than from the small ones, many of which were on that list.

We are debating this clause for one reason only, and that is the antics of the militant few. Without them this clause would not have been necessary. The Labour party has made the whole Bill necessary and has made community charge capping necessary. Sadly, I see no chance or intention of the Labour party changing what it has done in the past. If its current campaign of misinformation and calls to defy the law are anything to go by, the Labour party has no desire to help, and no chance of helping anyone. All it will do is harm services both locally and nationally. All it will do is damage local government and make it weaker than it is at the moment. Worst of all, if it persists in this manner, the Labour party will undermine democracy in this country.

If anyone is undermining democracy it is those who have contempt for the electorate. The hon. Member for Spelthorne (Mr. Wilshire) has spelt out—as have Ministers in Committee and in the House—the way in which he believes that choice should be available only if it conforms with his opinion. Nothing but contempt is displayed by using words such as irresponsible, irrational and excessive when talking about the right of people to vote to choose the level and quality of service that they wish to have.

The Bill and clause 104 illustrate admirably the duplicity that exists in the thinking and attitude towards the poll tax. Only a week ago in this House—one can read this in Hansard—the Secretary of State for the Environment said:
Everyone should have the right, through the ballot box, to influence the level of service that is provided and the price that they must pay through their taxes. That is the essence of accountability and of responsible democratic control of the services provided by local authorities"—[Official Report, 18 April 1988; Vol.131, c. 582.]
I cannot think of anything that undermines the principle laid down by the Secretary of State more than the idea of the icy fingers of poll tax capping.

The notion that people can choose what they want so long as they are not able to vote to spend the money to provide for their choice is not only duplicity, but runs extremely close to absolute contempt for the representative democratic system of our country. The Government, having taken control of the unified business rate, having changed the proposals in the Bill—as my hon. Friend the Member for Copeland (Dr. Cunningham) has said—regarding the distribution and organisation of the grant system so that equalisation between communities and the way in which we can protect those that have a low resource base is destroyed, and having lifted central control to 75 per cent. of all local government spending, now propose to lift it to 100 per cent.

When the Rates Act 1984 was debated, statements were made that were similar to those made today by the hon. Member for Spelthorne. The Government spoke about minorities being oppressed by the majority. They talked about people who lived in the high-rated areas of particular authorities having to pay for services voted for
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by those who did not pay or, according to them, did not pay sufficient into the coffers. They talked about people needing to feel the pain of expenditure on the services that they received. They devised a tax that they claimed, in its early stages, met the criteria that everyone would pay something and that people would feel that they were paying towards the expenditure on the services that they received. The Government went further and called that tax a charge that would be levied on the services delivered to the people who had voted for them.

Today, as at other times, we have reflected on the Prime Minister's decision, announced in October—it was not in the manifesto—that the Government would not allow people to vote for what they believed to be right and that they would not allow them to raise money to spend on services, but that the Government would do a double somersault—described by the current Secretary of State for Education and Science as intellectually unjustifiable —and bring in poll tax capping.

The last vestige of justification in terms of making people pay for what they vote for has now been stripped away. The poll tax capping reveals the Bill for what it is —an attempt to undermine and dismember the whole concept of public services. People will be told that they have one choice only—the choice of the market economy. People can do what they like, say what they like, think what they like, but in the end they will get what the Conservative Government believe is right for them.

Imagine if someone went into a supermarket and chose from the shelves the long-lasting, high-quality, value-for-money goods that they are willing to buy rather than cheaper goods that they saw on the shelves below. Just as they reach the check-out counter, however they hear over the Tannoy the voice of the matron or the sneer of the bully who suddenly steps forward and says, "I'm afraid you may have decided that that is the produce you want, but we have decided otherwise. In this supermarket you buy only the discredited and low-quality goods that we have decided are good for you."

4.45 pm

What sort of society would we be faced with if, instead of announcing that one could not buy the goods that one wanted in that supermarket, there was an announcement over the Tannoy that it was a BUPA market where one could have only the quality of health care that one could buy through private insurance in the private market? Imagine if it was announced over the Tannoy that people had to have private schooling, that people had to have private old people's homes and that the only choice was the private choice of private privilege. That is what is offered in the Bill.

The Bill represents a major dupe of the concept of citizenship and the concept of people choosing freely what they will and are willing to pay for the services that they want for their children, parents or themselves.

We should be concerned not simply with exposing the fact that the poll tax is unfair, unjust and unequal—the House has debated that at length and many Conservative Members have voted with us. We should also expose, once and for all, the idea that the Government believe in diversity and in freedom of choice. We should expose the idea that the Government believe that people have the right to determine for themselves the quality, extent and quantity of goods and services that they wish. That principle has gone out of the window once and for all.

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As the debate is being reported I hope that we can get over to people outside that others have been called irrational, excessive and irresponsible for wishing to vote for decent education, decent care of the old and the disabled. That is the biggest insult that the Government could ever give to the electorate. The electorate will give its answer on 5 May and at the general election.

Poll tax capping should be the final nail that scuppers the flagship and exposes the bilges to the tide of public opinion. That public opinion will sweep us forward to victory and it will demonstrate that the nation rejects the concept and the principle behind the Bill.

Perhaps I could continue the parable told by the hon. Member for Sheffield, Brightside (Mr. Blunkett). Say a customer goes into a shop and over the Tannoy to which the hon. Gentleman referred he is promised a certain type of goods. Let us say that the manager of that shop then changed the goods without notice and the customer walked out of the shop with totally different goods. That would be an extraordinary state of affairs and one would have thought that, in those circumstances, the customer should be protected.

Let me illustrate what happened in my career. I was a member of the Greater London council and I fought an election in May 1981 against Lord McIntosh. He put forward certain policies and was billed to the electorate of London as a moderate leader. Within 24 hours of his party being elected to power at the GLC, he was booted out by his party and within a year the electorate of London were faced with a 90 per cent. rate rise. Was that fair?

I am grateful to the hon. Gentleman for giving way for old time's sake, if for no other reason. He knows that Lord McIntosh, as leader of the Labour party
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in London, fought on an election manifesto that was inherited by my hon. Friend the Member for Brent, East (Mr. Livingstone), when he took over as leader of the GLC. There was no argument about policies. It was simply a question of personnel. Let us get it straight. In this case, we are talking about policies, not personnel.

I am very fond of the hon. Member for Newham, North-West (Mr. Banks), but he knows perfectly well that the present hon. Member for Brent, East (Mr. Livingstone) went round deselecting all of Lord McIntosh's friends. There was internecine war in the Labour party. The hon. Gentleman should ask Lord McIntosh what really happened when the moderates were kicked out of the GLC.

If Opposition Members do not accept that argument, let me put it this way. When I was a member of the GLC, it was under Conservative control and Sir Horace Cutler often had to deal with a Labour Government. The Labour Government at the time insisted that they were the masters of macroeconomic policy. I remember Sir Horace telling a Conservative group meeting that he had just been to ask the Secretary of State for the Environment—the right hon. Member for Bethnal Green and Stepney (Mr. Shore)—for something and had been told that he could not spend the money. Sir Horace abided by the decision because he accepted, as local government has traditionally accepted, that we live in a unitary, not a federal, state and that central Government have the right to lay down macroeconomic targets by which local government must abide.

Although the Bill will ensure that, over time, local authorities will be more accountable to public opinion because of the new, more sensible rate support grant, because of the introduction of the community charge, which many more people will pay, and because of the introduction of the new business rate, we must legislate against a recurrence of what happened with the GLC in May 1981. That is especially true of the transitional period, during which an authority may use the transitional arrangements to impose excessive demands on community charge payers before it becomes truly accountable under the system. The capping power is a reserve power that will be used only rarely, but it is an essential safeguard that the Government must leave in the Bill.

One can always tell when the Government are short of support: the hon. Members for Spelthorne (Mr. Wilshire) and for Gainsborough and Horncastle (Mr. Leigh) come to their aid. I am never sure whether it advances their cause. Many members of the Government will be horrified to read what the hon. Member for Spelthorne said today. I wrote down this sentence: "Non-co-operation with central Government is in my view the sign of weak local government." He believes that local government must be the lackey, whereas our tradition is that local government is a separate——

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The amendment shows the hollowness of the Government's argument. Amendments Nos. 157, 158, 159 and 160 deserve our support, and when it comes to the Division in half an hour I and my colleagues will vote for them. I am not so sure about amendments Nos. 161 and 162. They provide that, under poll tax capping, we would retain the system of rate capping, which means that authorities would be capped after the event. I see some logic in intervening in the relevant year rather than the subsequent year. To give an obvious example, my colleagues in Tower Hamlets thought that it was unfair that their rates were capped as a result of decisions taken by the previous Labour administration, which was entirely different politically. I accept the argument for that system being changed.

Instead of listening to the hon. Members for Spelthorne and for Gainsborough and Horncastle I would rather listen to experts whose views on local government are objective, not subjective. When the Minister announced poll tax capping in the autumn, the lead article in the Local Government Chronicle said this:
Poll tax capping an illogical humbug.Local Government Minister Michael Howard has finally destroyed the Government's argument in favour of community charge. Since the proposal surfaced … assorted secretaries of state and ministers have been declaiming whatever technical and financial problems it posed, the community charge had one over-riding merit—it would ensure the accountability of councils by giving every voter a direct stake in financial decisions.

No. Other hon. Members wish to speak and we have only half an hour left.

The system which the Government believe would make local government accountable has been proved to be defective. They must know that in their heart of hearts. The article in the Local Government Chronicle concluded:
To cap community charge smacks of dishonesty and selective vengeance.
That is reminiscent of the debate in 1984 on rate capping, when the right hon. Member for Old Bexley and Sidcup (Mr. Heath) said:
I do not believe that these powers should be given to the Minister."—[Official Report, 17 January 1984; Vol. 52, c. 188.]
The former Secretary of State for the Environment, now Lord Rippon, said that the Bill which introduced rate capping was "deplorable", raised "major constitutional issues" and was a classic example of "elective dictatorship". When we reach the Division, I guess that it will be the fifth vote during the Report stage of this Bill when some Conservative Members will have the courage of their convictions and will vote against the Government's policy.

The Minister made his case in Committee on 17 March —this deals with one of the points made by the hon. Member for Gainsborough and Horncastle—when he said:
Over time, the system"—
that is the poll tax—
will curb even a council which, ignoring the ultimate electoral consequences, irrationally embarks on a policy of excessive spending to the clear detriment of those whom it claims to serve. But the new system of local finance will not guarantee instantaneous relief from an outbreak of irrational behaviour where, perhaps to prove some kind of distorted political point, an authority decides on excessive spending policies contrary to all reason and to the interests of its electors. In such a situation the public will expect—quite
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reasonably—that the Government should take some rapid action."—[Official Report, Standing Committee E, 17 March 1988; c. 1472–3.]
That summarises the Government's patronising, derogatory and nannying attitude to local government. They believe that Whitehall always knows best. The Government realise that they are in trouble because of arguments similar to the one advanced by the Minister that day.

I rephrase the Minister's remarks in this way. Over time, the system of poll tax will curb even a Government who, ignoring the ultimate electoral consequences, irrationally embark on a policy of excessive unfairness to the clear detriment of many of those whom they claim to be helping. The old electoral system does not guarantee instantaneous relief from an outbreak of irrational behaviour where, perhaps to prove some distorted political point, the Government decide upon an absurdly unfair taxation policy contrary to all reason and to the interests of all but their wealthy electors. In such a situation, the public—that is where the debate will go after today—will expect that anyone who can, including Opposition, Government Back-Bench Members and the House of Lords, should take rapid action. We have no doubt that they will. If only we had legislation to cap the Government when they embark upon Irrational, excessive policies. [HON. MEMBERS: "Decapitation."] Decapitation is an option, but it is slightly less likely to be produced.

5 pm

There are many other ways forward. The Government's folly is that they have not hearkened to advice from elsewhere. Instead of introducing masses of ever more complex legislation year after year in the search for a system that can be made to work, the Government should perhaps face up to what the Mail on Sunday recommended only yesterday and other papers have recommended before. The way to make councils accountable is to change the electoral system and have proportional representation for local government. [HON. MEMBERS: "Oh."] Conservative Members say "Oh," because it would work, and they know that it would work; the only trouble is that such a system would not necessarily put as many of them into power as the present system. They are concerned not about local government working but about taking local government over.

No doubt the Minister will have seen the Mail on Sunday editorial early yesterday morning. As he knows, that paper does not always come out on our side; on the contrary, it often comes out on his. On this occasion, it said:
The best solution for the Government is to cut its losses and plump, albeit through gritted teeth, for a progressive tax based as much on ability to pay as on demand for services. And if the Government is serious about making local government properly accountable to its electors, it should stop fiddling about with taxes and bring in proportional representation for council elections. Radical, brave politician though she is, has Mrs. Thatcher the courage to do either or, preferably, both?
We now know that if the poll tax comes in—it is a very big "if"—the Secretary of State will ensure that every poll tax payer receives an at-a-glance guide to council efficiency on the back of his poll tax return to show him how his council compares to councils around the country. What it will not show is what independent studies say will happen under the poll tax. As the Minister knows, the Chartered Institute of Public Finance and Accountancy has
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calculated that if the community charge had been in operation between 1986 and 1988 not one authority in the whole of England would have been able to claim that changes in its spending per adult had been met by comparable changes in its community charge. For 29 authorities, variations in grant in that period would have meant that, even where they had cut their spending, the community charge would have increased. For 21 councils, community charge would have gone down when spending went up. For 228 councils, the community charge would have increased when spending increased, but faster. There will be no direct accountability anywhere. There will be no direct match between what councils spend and the poll tax that they levy. Nevertheless, we are to have capping—on a blanket basis involving the application of uniform principles. That will ensure that, in the end, whatever council is elected and no matter how many electors vote —it could be 100 per cent.—the Government could still say, "We know best."

The poll tax is meant to make local authorities accountable. We should ask, "Accountable for what and accountable to whom?" The Government have made their answer clear. The local authorities will be accountable not to their electors for carrying out the policies for which they have been elected but to central Government for administering central Government policies. If they do not do what central Government want them to do, they will be capped and given directions. For any democrat, the case against poll tax is overwhelming. Sadly, we do not have a Government of democrats.

I note that the hon. Member for Spelthorne (Mr. Wilshire) has again stated his objection to rebates and to some of the exemptions included in the Bill. I would not accept any part of his analysis of the Bill, but no doubt he, as an honourable person, will be giving serious consideration to voting against Third Reading, as the Bill includes measures that he interprets as contrary to the principles of accountability.

Given all the pressures and devices in the Bill to force authorities to act within given parameters, it seems strange that we should then have capping. The majority of people may have decided—perhaps very firmly—on a policy that favours services. Under this provision, however, the Government can insist that such a policy is not followed. My hon. Friends the Members for Easington (Mr. Cummings) and for Barnsley, East (Mr. Patchett) were here earlier. In their constituencies, there is vast support among working people for the provision of services. Even if 75 or 80 per cent. of the electorate vote in local government elections in favour of spending their own money collectively to provide services and do things that they could not do individually, they will be stopped by diktat of a Government who can claim only 42 per cent. of the votes. That is an obscenity.

Some Conservative Members argue in favour of the Bill for the one simple reason that the proposal was included in their manifesto and that they must therefore stick with it solidly. I do not accept that argument. I ask them to consider what the manifesto said about the poll tax:
We will reform local government finance to strengthen local democracy and accountability.48
The accountability argument has already gone out of the window over the question of joint and several liability. It goes out of the window entirely in the light of the poll tax capping provisions. Whatever local authorities decide to spend to provide services, they will be prevented from doing so. A local authority cannot be made accountable by being made to spend more money but only by being made to spend less.

The manifesto continues:
Local electors must be able to decide the level of service they want and how much they are prepared to pay for it.
The poll tax capping runs contrary to the manifesto commitment, which says that the local electorate must determine what services it wants and how much it is prepared to pay. I hope that those Conservative Members who stick with the rather simple notion that because the proposal appeared in the manifesto they must go along with it will take that on board, because we may then have some chance to do something about this obnoxious provision.

The hon. Member for Southwark and Bermondsey (Mr. Hughes) wrote down what I said and then twisted it. I have written down what the hon. Member for Derbyshire, North-East (Mr. Barnes) said about manifestos, and I am anxious to check that I got it right. Was he saying that he does not go along with the idea of sticking with a manifesto?

What is a manifesto? A manifesto commitment means something if it has been fully and fearlessly discussed by the electorate—if it has been put in front of them so that they can make a solid decision about it. In the last election, that did not happen with the poll tax, except in Scotland, where the proposal was solidly rejected. I accept that, all other things being equal, hon. Members are committed to their manifesto proposals, but all other things are not equal in this case. The poll tax was not a major subject of discussion at the last election and other issues and values are at stake. Democracy depends not just on a document on which people have voted but on feelings, understandings, pressures and democratic pluralism in society.

On Thursday we discussed contingency funding and grant provisions, and from the debate it was quite clear that the contingency fund provisions are not adequate. Problems have emerged about emergency expenditure and Parliament recently applied the Bellwin rules to expenditure on gale damage. That type of expenditure still requires local government money. The legislation will increasingly require the full amount to be met out of the poll tax provision rather than out of the unified business rate or from the grant provided by central Government.

That situation will be made excessively worse by the introduction of poll tax capping. When an emergency arises, an authority will have to spend money out of the
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poll tax provisions to meet it, but will then be capped. The only way in which it will be able to meet its commitments in an emergency will be by further cutting the services and provisions in its area. The Minister needs to answer that point.

I support the amendment. It is quite clear that this part of the Bill exposes the total hypocrisy of the Government. They have introduced the poll tax because they say that they want to make services more closely accountable to the electorate; then they come up with the proposal about poll tax capping.

The Government want to set up a system of local government finance that creates maximum pressure for the reduction of local council services, and they have done that in three stages. First, they have created a penal and unfair tax system that puts caring councils in the difficult position of having to impose the tax or cut services. Secondly, the tax gives a financial incentive to people in need of local services to vote against them. Thirdly, via poll tax capping, the Government give themselves the power to impose service cuts on councils and electorates that have not been bullied into making cuts themselves.

It is clear from the Government's proposed poll tax capping that they want to leave nothing to chance. The Government are not interested in local democracy because, ultimately, they do not trust the local electorate, believing that their judgments are preferable to those of local people elected to take the decisions. The Secretary of State has already given us his vision of what local authorities will be. He has said that they should meet once a year and should sit down and discuss the way that all the contracts for services are to be given to private companies.

Then, in the words of the Secretary of State, the councils will retire and have a good long lunch. The Secretary of State knows all about good long lunches. I notice from the latest figures that the Department of the Environment spent £66,000 on official hospitality last year. Perhaps that is what the Secretary of State thinks local authorities should do.

As I have said, this part of the Bill exposes the total hypocrisy of the Government. It will make the already difficult task of local authority treasurers in drawing up their budgets that much more difficult.

I shall be brief. I think that it is generally accepted that central Government are responsible for macroeconomic policy. However, there may be disputes in central Government about the efficacy of some aspects of macroeconomic policy. We have heard of a dispute between the Prime Minister and the Chancellor of the Exchequer about the exchange rate. In the light of difficult decisions, that is perfectly understandable. It should not be in dispute that, if the Government are producing a poll tax in order to advance accountability, hon. Members and the electorate should be entitled to take them at their word.

In a speech on 19 March, the Secretary of State for the Environment uttered some graphic words. He said:
One Labour pressure group described the Community Charge as 'a straightforward attempt to create conditions for taxpayers'revolts against council spending plans.'
I have no doubt that some Conservative Members would say, "Hear, hear" to that. The Secretary of State went on:
They've got it in one! Councils who are efficient and frugal have nothing to fear. But with Community Charge
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figures in some areas of £500–£600, of course local people will rebel. They will rebel against profligacy and inefficiency and throw the guilty councillors out.The weapon of democratic accountability is a very powerful one for us Conservatives: use it. The message is: if you want a lower Community Charge—vote for it, and vote Conservative.
What happens if people do not obey the Secretary of State? The answer is that the Government will need back-up powers. Such powers are in the Bill and in the Scottish Act because the Government are fearful of democratic choice. They ought to come clean about that. Accountability is not written in concrete. It will vary. People may have a different view of the need over a five-year Parliament.

I am sorry, but I shall not give way. I intend to be brief because my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) wants to wind up.

If the Government alone are to decide, then let us have all the elections on one day and have the matter determined for 10 years so that the Prime Minister can continue to make her way through the parliamentary and economic process. Flexibility and democratic choice mean that people will have differing views of what is needed in different areas. We must have regard to other areas of power and of feeling within the system. That is truly what the Tories fear.

The debate on these powers has largely been a re-run of the debate in Standing Committee. There have been one or two changes in the cast, but on the whole we have heard similar arguments. We are delighted to see back with us after his illness the hon. Member for Sheffield, Brightside (Mr. Blunkett). Quite clearly his illness has done nothing to dull his appetite for controversy. I think that he was the only speaker to advance the arguments beyond those that were put in Committee. He introduced to the debate the metaphor of the supermarket which, as far as I can recall, played no part in the previous proceedings on the Bill. I was delighted to hear the hon. Gentleman make use of that metaphor because it shows that all that we have been saying about the importance of value for money in the provision of local government services is at last getting home to the Opposition.

I do not think that the analogy was quite as compelling as the hon. Gentleman seemed to think it was. Of course, the relationship between the customer in the supermarket and the supermarket owner is not quite as unbridled as the hon. Gentleman seemed to suggest. Transactions in the supermarket are always subject to the intervention of the trading standards officer, although I have to concede that my right hon. Friend the Secretary of State probably does not often think of himself as a glorified trading standards officer.

One of the newcomers to the debate, the hon. Member for Southwark and Bermondsey (Mr. Hughes), raised a
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point on the basis of some of the calculations by CIPFA. The hon. Gentleman should know that those calculations are based on a projection of the existing grants system and include, among other features of the existing grants system, the penalty system, which, of course, will not be part of the new regime. If such calculations are based on the existing grants system, it is not surprising that the results lead to anomalies.

We recognise that the existing grants system has instabilities that would lead to such results. That is one of the reasons why we think it important not to have that feature in the new grants system, but to have in its place a much more stable grants system that will enable people to assess to a greater and more effective extent the performance of their local authorities.

The Minister cannot confirm to the House that there is any certainty or objective agreement that the new system will produce for each local authority in England a commensurate rise in poll tax with a rise in spending and a decrease in the poll tax with a decrease in spending. There is no guarantee that that would follow from this legislation.

We are certainly objective. We intend to produce a given figure for a standard level of service, which will provide a ready reckoner on the basis of which people will be able to understand whether they are getting value for money.

We have made it clear on more than one occasion that we see the capping power introduced in the clause as a reserve measure. It is not a measure to be used as a matter of course or in the circumstances referred to by the hon. Member for Dunfermline, West (Mr. Douglas). The people of an area certainly will be able to vote for a relatively high-spending authority if they so choose. Because of the greater accountability which the new system will introduce, all the people of the area will be paying towards the cost of the spending of that authority and no doubt they will take that into account.

Nevertheless, there is a need for a reserve power to deal with the circumstances referred to by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh). There is a particular need for a reserve power during the transitional period in those areas where there will be a dual system running, with a combination of the rating system and the community charge and where accountability will not be as clear as we should like it to be when the system is fully in force. It is important that there should be such a reserve power—rarely, if ever used we hope—to protect the charge payers of an area against extreme cases of extravagant and irresponsible local authorities.

All the evidence shows that, when the Government have intervened to extend such protection to ratepayers under the existing system, that protection has been welcomed by the people who live in the local authority areas concerned. We saw some of the results of that protection to the residents of Ealing during the election last year.

How would the Minister respond to the fact that within three months of rate capping being levied in the city of Sheffield the Conservatives lost two seats in an area that they had previously held for 60 years? Is he aware that such a swing would ensure that if the hon.

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Member of Sheffield, Hallam (Mr. Patnick) were standing for election on 5 May he would lose his seat on Sheffield city council?

We have to consider all the evidence. I do not suggest that it applies universally in all cases, but the evidence of the way in which people voted at the general election, when they had to decide between a Government who were prepared to extend that protection and a Government such as that who would be provided by the Labour party, which would abdicate all responsibility in those matters, shows that people have tended to vote, when they have had a real choice in those matters, for the party that would extend that protection.

The Labour party promised in its manifesto that it would no longer afford such protection and that it would let local authorities spend to their hearts' content. That is an extremely irresponsible attitude and an abdication of responsibility in an important area in which central Government have a role and should continue to have a role. Because we recognise the responsibilities of central Government to extend protection in those extreme circumstances in which it is necessary to intervene on behalf of local people we wish to keep a capping power in the legislation.

The one thing which the clause reveals is the Government's total lack of confidence in their own legislation. I have faced incredulity when I have explained to people as honestly as I can—I have never been accused of not telling the truth about the Government's legislation —that twice as many people would be involved in direct payment, and that the Government's reason is that those people have the vote and that more people will be forced to vote because they will get a bill. Part of the theory is that people will have to pay for the consequences of the vote.

I have explained all that, and I have then reminded people that when they have voted, knowing what the poll tax will be because the budget will be fixed before the election, and the party which wins has a higher poll tax perhaps because it wanted to spend more on nursery education—or, in county council areas, on introducing concessionary bus passes for old age pensioners—once the election is out of the way the Government can say, "Hang on. You have won the election and you were honest about the poll tax, but we do not like your poll tax and we are ging to use section 104 of the poll tax legislation to change it retrospectively." People just do not believe me when I tell them that, because it contradicts all that Minister have said about accountability and democracy. The arguments about universal accountability go straight out of the window.

No. The hon. Gentleman voted for the guillotine. We are to have a vote shortly.

The clause shows the Government's lack of confidence in their own legislation. If they were to replace the clause, they could get around the problem that they do not trust the electorate. In London and in the shires councils are elected for four years and they do not have to face their electorates annually. The answer is to replace the clause with annual elections. We would vote for that. There would not need to be a vote, as no hon. Member would
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oppose such a measure. The Government could have on the nod a Bill for annual local elections all over the country.

That is Labour party policy. We have demanded it in the House and in Committee and we have published Bills, yet the Government are scared stiff to promote legislation for annual local elections. They would not even come to the House to force annual elections in metropolitan districts of the great cities such as Sheffield and Birmingham where in 1988–89 there is a gap because of the abolition of the metropolitan councils. We want that gap closed and we want annual elections in those areas and for every local authority. That is the way to bring about accountability and democracy in local government, instead of undermining those on both sides of the political divide who go into public life to serve their fellow citizens.

What self-respecting person will go into local government knowing that all his decisions will affect only one quarter of local government expenditure after the Bill instead of one half before the Bill? Why should they bother when they know that, even for a quarter of local government spending, even if they fight an election and win, the Government can say, "We don't like your budget. Here is a new budget." They can do that not only in May or June after the election but in any month during the financial year. They can even come back the following January and retrospectively change the local authority budget for that year.

That is absolutely outrageous. It has nothing to do with democracy or accountability. It has everything to do with Whitehall Ministers saying that they know best and absolutely nothing to do with the arguments that they put forward. It is against that background that we are opposing this clause root and branch.

Local authorities are not, in the words of the Minister, spending any old money that they can get their hands on. They are spending money that they have raised, not Whitehall money. They put their budgets before the electorates and they won their elections on that basis. The Minister's argument that they have freedom to spend what they like is incorrect. Each one has to raise the money in advance of the elections, with a budget. That is honest and democratic. It is what accountability is about.

§It being after half-past Five o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the Orders [22 February and 13 April] and the Resolution [18 April], to put forthwith the Questions on amendments moved by a member of the Government, of which notice had been given, to the end of clause 114.